When Manufacturing Flounders: How Montreal spurred growth when key jobs evaporated

In the latter years of the last century, Montreal economic development specialists were in the midst of a dramatic change: their manufacturing sector was about to experience serious decline. The Canadian dollar was depressed against the US dollar, and outsourcing made manufacturing facilities move across borders and overseas. Like many of the world's wealthiest nations, Canada was watching its manufacturing sector shrink. Between 2004 and 2008, one in seven manufacturing jobs had disappeared.

Montreal was determined to not become a victim of outsourcing and other changing market forces. Montreal business and policy leaders became proactive in its actions, working to move manufacturing sector workers from the factory floor to other jobs. Montreal worked with higher education programs -- universities and technical schools -- to provide unemployed manufacturing sector workers with access to career opportunities and retraining. they surveyed their industry landscape and noticed that they had growing clusters in other market areas that had not yet been accessed. The business and policy leaders worked together with small businesses, nonprofits, corporations, governments, and support organizations to craft policies and programs to enhance those heretofore under appreciated industries. In 2007, manufacturing lost 19,000 jobs while service sector jobs increased by 97,000. This positive growth was due in great part due to a rapidly-growing video game industry.

The resulting public/private partnerships encouraged growth in these sectors by supplying a home-grown pool of talent and development-friendly policies. It was initiatives such as these that led to market stimulation and support for creative businesses like world-famous performing arts venue Cirque du Soleil. The creative sector now accounts for 30% of the region's jobs. All service sectors are growing at 34%.

Like Montreal, our local, state, and federal governments should be crafting policies and encouraging public/private partnerships when major industry segments start to decline in certain areas. Such proactive measures could have stalled and even offset the damage inflicted on Michigan as a result of the auto industry collapse. I applaud the Seattle City Council Bill 116574 for raising the minimum Business & Occupation tax threshold for businesses from $50,000 to $100,000. It will only serve to stimulate small business growth and development in these tough times as manufacturing jobs decline and major corporations implemented hiring freezes and layoffs and cut back on outsourcing to local manufacturing and other vendors.

Our own under developed industries with high growth potential will be able to keep a bit more cash in their businesses for creating jobs, marketing their services, and adding much needed capital resources to their fledgling organizations. More actions like these are needed to keep our communities focused on rebuilding a job-growing economy. Just because some jobs move south, north, east, or west doesn't mean that all is lost. If we look around a bit, we might find, like Montreal did, that we have thriving industries already blossoming in our economic gardens. We just have to tend to them and encourage them to grow.

What is your region doing to support business and create jobs? I want to hear from you!

When Big Corporate Decisions Make Huge Local Impacts: Boeing Purchase Impact on Puget Sound

Today has been a very intense day. I gleaned all of this by consuming 7 minutes of news coverage: Nearly 1 billion people tuned in or turned out for the funeral of pop icon Michael Jackson. Human rights organizations around the world are calling for the release of Iranian election protesters. The Taliban is buying children for suicide attacks. The District of Columbia will recognize same sex marriages. Nobody knows what's going on with soon-to-be-ex-Governor Sarah Palin. SC Governor Mark Sanford is still dominating with embarrassing headlines. And Boeing has announced the purchase of a 787 fuselage assembly vendor in North Charleston, SC.

Being a SC native, it's interesting to see the state garnering so much attention (I didn't see any serial killer updates in the 7-minute stretch). But having lived in Seattle for 13 years, I am vested in the success of the Puget Sound Region, small businesses in particular. Any big news that takes jobs to another region is putting strain on an already flailing small business environment in the Greater Seattle area.

When a major corporation decides to move part or all of its business from one region to another, it doesn't just affect that company and its workers. The surrounding community is impacted by relocating employees who sell their houses. The region is impacted by individuals who lose their jobs and rely on social services to survive. These impacts dent a housing market struggling to recover and stomps on already overburdened state government budgets (or should I say deficits?)

Small businesses are impacted by the diminishing buying power of their consumer base. Other small businesses are impacted by the loss in potential first- or second-tier supplier contracts with the corporation and its major suppliers. When these small businesses lose their revenue streams, their employees start losing their benefits and wages, then their jobs. Then those employees start relocating to find better jobs or have to rely on social services until they can be re-trained in another industry or find another job in their fields. Small businesses shutter their doors, leading to a decline in state tax revenues and job availability for the nation's 9.5% of folks that are unemployed (note that small business owners are not traditionally represented in that figure).

Such a simple business decision in one company has a huge impact on an entire region. A friend who recently relocated from Detroit can tell how she's upside down on a Michigan mortgage while clinging to her small business engineering job here in Washington state. With a new Seattle mortgage under her belt, can she afford to relocate if her job moves east?

I have joined the Washington Aerospace Partnership to help keep the Seattle area the world's largest aerospace cluster and to help the more than 650 aerospace businesses in our state gain access to the resources they need to sustain revenues and fuel a job-growing economy. If you as an organization or individual would like to learn more about this partnership and get involved, please visit the Washington Aerospace Partnership web site.

If you are in SC or other regions of the country impacted by the changes in the manufacturing sector, I would love to hear from you. I will be writing a post about how Montreal addressed a decline in its manufacturing cluster and is still thriving as the world's third largest aerospace cluster.

It's Our Anniversary -- and Time for Some Changes

It's been an amazing journey: TsuluWerks has been in business for 10 years. As we reflect back on some of the great consulting and design work we have provided for our corporate, small business and nonprofit clients, we realize that we've changed. We've grown up quite a bit and want to update our company to reflect those changes.

We're leveraging social media much more to provide you with more resources. We have added new Facebook pages for our consulting and speaker services and for Shameless You. You can also follow us on Twitter to get great business resources.

Keep an eye out for changes in the upcoming weeks, like the new case studies we added to our web site. We will continue to update and improve our resources and solutions to help your organization grow and prosper.